PVRs Wont Destroy TV Advertising Says Mindshare
Personal Video Recorders (PVRs) won’t destroy TV advertising but they will upset the status quo and force advertisers to look at more innovative ways of getting their messages across says Mindshare in a new report Advertising In Fast-Forward: Understanding The PVR Phenomenon.
Initially, the impact on total audiences may be modest but we can expect the impact on this specific audience to be more dramatic, says the report.
As the cost of PVRs fall, it is expected that rapid uptake will be amongst younger viewers. As those same young people continue to watch less and less television, PVRs will make it even harder to reach them with commercial messages on TV.
Mindshare analysed the potential threat that PVRs pose to traditional TV advertisements and it forecast that 15% of people will be avoiding advertisements in 2010 regardless of PVRs but with PVRs making this easier, the figure is expected to rise to 75%. However with time-shifted viewing possible and PVR penetration still expected to be fairly low, total advertising audience lost will have increased by just 12% by 2010.
| PVR Ad Avoidance (2010) | |
| % | |
| Ad avoidance without a PVR | 15 |
| Ad avoidance with a PRV (time-shifted) | 75 |
| Incremental ad avoidance (time-shifted) | 60 |
| Time-shifted viewing | 60 |
| PVR ad avoidance (net change) | 36 |
| PVR penetration by 2010 | 32 |
| Total advertising audience lost | 12 |
| Source: Mindshare, April 2004 | |
It is thought that the people who skip advertisements at the moment will be the same people who use PVRs to skip commercial breaks but rather than channel surf, they will see the commercial at high speed which Mindshare purports is better than not being seen at all.
On the other hand, PVRs may encourage more viewing, not just in younger viewers but across all age groups. Early research shows that PVRs improve the quality of programming viewed and this consequently leads to more TV viewing.
The Interactive Television Search Institute recently found that 45% of PVR viewers reported that they were actively watching more TV and a wider variety of programmes.
Mindshare says that PVRs will encourage the ‘Super Bowl effect’ where big well-known brands will be actively watched by viewers who can relate to these, rather just passively accepted. Pepsi’s advert starring Britney Spears was the most replayed section of the whole Super Bowl coverage.
In the US, skipping of fast food and credit card advertisements during time-shifted viewing has risen to 93% but only 33% of beer advertisements are skipped. This highlights the natural selection of TV advertised brands that will occur in the PVR era. TV advertising will need to change dramatically to “consolidate around a smaller number of key industries”.
With some other industries looking set to shift away from TV advertising, other media such as outdoor and retail media look set to benefit most. As well as this, Mindshare expects a move from straight forward TV advertising to product placement and sponsorship to get the message across.
PVRs will raise the advertising stakes says Mindshare. It will increase the risk and return on advertising and magnify the difference between good and bad commercials; with bad advertisements routinely skipped and the best viewed more frequently.
News and sport programmes are more likely to be watched live and therefore these are expected to be sold to advertisers at a premium and live interactive TV is expected to become even more popular with programme makers and viewers.
As yet, PVRs have made an uninspiring impact on the UK although, universally, they have received a positive reception. Mindshare suspects that this is because UK viewers are still less prepared to pay for TV and the success of Freeview backs this up. Therefore, there is little incentive for non-pay TV channels to develop sophisticated mechanisms to aid in the skipping of adverts when they rely on advertising revenue says the report.
